[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[2]
JUDGMENT
THE COURT: On 30 October 2024, this Court allowed an appeal brought by Blue Mirror Pty Ltd from the dismissal of claims, relevantly, against the second respondent Mr Anthony Tan ("Anthony") and the third respondent, Australian Construction Company Ltd ("ACC"): Blue Mirror Pty Ltd v Tan & Tan Australia Pty Ltd (in liq) [2024] NSWCA 253. There were other issues in the appeal, including Blue Mirror's decision not to seek leave to appeal against the first respondent Tan & Tan Australia Pty Ltd (in liq), which had been placed into liquidation after judgment had been reserved at trial. For that reason the parties were given an opportunity to be heard as to costs, although at [162] it was said:
As presently advised, I incline to the view that (a) costs should follow the event, (b) Blue Mirror's decision not to seek leave to proceed against Tan & Tan in this Court should not have any material bearing upon the exercise of the discretion as to costs payable by Anthony and ACC, and (c) there should be no interference with the order that Blue Mirror must pay Tan & Tan's costs at first instance, and to the extent that any costs were incurred by Tan & Tan in this Court, on appeal. However, the orders I propose will permit the parties to be heard as to costs both at first instance and in this Court.
The parties have supplied written submissions (dated 14 and 27 November 2024) in accordance with the Court's directions. They have been unable to agree, but the two areas of dispute are of very short compass.
It is common ground that Anthony and ACC should pay Blue Mirror's costs at trial and on appeal. There is agreement as to the form of order, save that Anthony and ACC maintain that the words "to be agreed or assessed" should be appended to the order. This dispute is purely formal. There is no difference between an order that a party pay another party's costs, and an order that a party pay another party's costs as agreed or assessed. Neither gives rise to an enforceable obligation to pay until the amount of the costs has been agreed or assessed. There is no reason to depart from the form of the orders proposed by Blue Mirror.
The second matter in dispute concerns security. It is common ground that $100,000 in Blue Mirror's solicitor's trust account is held subject to an irrevocable direction that it be held on account of security for costs of Tan & Tan, Anthony and ACC. It is also common ground that Blue Mirror paid into Court $225,000 by way of additional security for costs.
Blue Mirror seeks orders releasing both amounts. Anthony and ACC propose that the amounts continue to be held by way of security, to be released if no application for special leave to appeal to the High Court is made within the next 14 days, or if such application is made but later dismissed. If however special leave to appeal is sought and granted, then the security are to abide by the determination of the appeal.
The position of Tan & Tan may be put to one side. Its liquidators have confirmed that they will not pursue the costs orders made in its favour. It is not disputed that the only defendants/respondents with any potential claim on the moneys provided by way of security are Anthony and ACC.
As things presently stand, Anthony and ACC have no entitlement to costs, and instead will, following orders which are undisputed following the outcome of the appeal, have a substantial albeit unqualified liability to Blue Mirror for costs. It is possible that that may change, if special leave is sought and granted and the High Court allows an appeal and alters the existing costs orders. The regime proposed by Anthony and ACC is premised upon that possibility, and no other.
We think this is a clear case. So far as litigation in this Court is concerned, it is at an end, and prima facie Blue Mirror is entitled to the fruits of the judgments it has obtained. It is true that there is a possibility that Anthony and/or ACC may seek special leave to appeal. In "exceptional circumstances" this Court may stay the effect of its orders against the possibility that special leave is sought and granted: Rinehart v Welker (2012) 83 NSWLR 347; [2012] NSWCA 1 at [41]-[47].
But no application for special leave has been made to date. The time for doing so (which was 28 days from this Court's principal judgment) has expired, so it will also be necessary for Anthony and Blue Mirror to obtain an extension of time from the High Court. There is nothing before this Court to explain what reasons, if any, may be put forward to warrant a favourable exercise of discretion as to an extension of time.
More importantly, there is nothing in this Court to suggest what proposed grounds of appeal might be put forward before the High Court, and thus no basis for expressing any view as to the prospects of success, or whether they raise any question of principle or public importance or are likely or unlikely to obtain a grant of special leave.
Anthony and ACCC make the further submission that "[t]he corporate status of [Blue Mirror] is questionable with [its] sole director and secretary was [sic] sentenced on 8 November 2024", such that s 206B of the Corporations Act 2001 (Cth) would apply. Taking what is said in the submission at face value, even if a company's sole director is disqualified, that does not of itself make its status "questionable". It is entirely unclear whether an alternate director has been appointed (for the sentencing on 8 November 2024 must have been foreseen in advance), and even if it has not, there is scope for the appointment of a director under section 201G of the Corporations Act 2001 and under a residual power at common law. But for present purposes, it suffices to say that the disqualification of a sole director from holding office does not disentitle his or her company from enjoying the ordinary rights as a successful litigant, which include a release of the security which it provided against the possibility that it might receive an adverse costs order.
For those reasons, no basis has been made out that this case falls within the "exceptional circumstances" when a stay is appropriate pending the possibility of a grant of special leave. It follows that orders substantially in the form as sought by Blue Mirror will be made. The order for costs in its favour applicable to its appeal will extend to its costs in respect of the dispute concerning those orders.
The Court orders:
The second and third respondents pay the appellant's costs.
Set aside order 3 made on 1 February 2024 in the court below insofar as it concerned costs between the plaintiff on the one hand and the fourth and fifth defendants on the other, and in lieu thereof order that the fourth and fifth defendants pay the plaintiff's costs.
The moneys paid into Court by the plaintiff in the Court below as security for costs be paid out to the plaintiff together with any accrued interest.
The sum of $100,000 held in the trust account of the solicitor for the plaintiff as security for costs in the Court below is released and may be paid to the plaintiff.
[3]
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Decision last updated: 04 December 2024